The European Union has decided to add the Sri Lankan separatist group, the Tamil Tigers, to its list of banned terrorist organisations.
Tamils in Europe are a source of funds for the Tigers
The decision taken by ministers in Brussels means Tamil Tiger assets in the EU's 25 states will be frozen.
Recent violence in Sri Lanka has destabilised a ceasefire signed four years ago with the government.
Washington earlier took similar action against the Tigers, saying it wanted to cut off their access to arms and money.
Correspondents say Europe's Tamil diaspora is a valuable source of funds for the Tigers.
The Tigers withdrew from peace talks aimed at ending Sri Lanka's civil war which saw more than 100 deaths in recent weeks.
An EU ban, they said recently, would only "exacerbate the conditions of war" and could deter them from further peace talks.
The ban was agreed soon after the group reportedly agreed to attend talks in Oslo next month on the security of peace monitors.